An inquiry into the sector is long overdue, and the best source of private capital is pension funds
It’s a shame that Jeremy Hunt, health secretary from 2012 to 2018, didn’t propose an inquiry into private equity-style funding models in the care home sector when he had the power to command one. An investigation would have been a good idea then, just as it would have been 20 years ago.
Such an inquiry might have come to the bleedin’ obvious conclusion that financial engineers, fixated on viewing care homes as property assets to be leveraged via debt, are not natural owners of businesses charged with providing care for elderly people. In such a sensitive sector, a basic level of financial stability ought to be a requirement – and that’s not what one generally gets via an approach that tries to transform thin operating margins into outsized financial returns by injecting debt.
